Arto Aas, managing director of the Estonian Employers' Confederation (ETTK), said on Thursday that the Estonian Trade Union Confederation (EAKL) giving up the already agreed upon 7 percent increase in the minimum wage from 2020 is regrettable.
"Our opinion is that, in a situation in which productivity has only grown a couple of percent, the average wage has increased 6 percent and the economy is cooling down, a 7 percent increase in the minimum wage is a very good offer," Aas told BNS.
He added that the EAKL demanding a wage hike that exceeds growth in productivity and the economy by severalfold will end up reducing businesses' competitiveness and driving low-skilled jobs away from Estonia.
"That way, the people earning a minimum wage may end up unemployed altogether," Aas said. "It would be pointless to increase wages in January and start laying off people in February."
Delegations from the EAKL and the ETTK reached an agreement in early September to increase the minimum wage by €38 per month in 2020. According to the agreed upon plan, the minimum wage would have risen to €578 per month, or €3.44 per hour, as of Jan. 1.
The EAKL council, however, considered this insufficient, and proposed to the ETTK that they continue negotiations. Trade unions are now seeking possible solutions for continuing talks and reaching an agreement on the minimum wage for the coming year.
Government not getting involved
Aas noted that the situation was also discussed by the council of the ETTK, which decided to hear the trade unions' new arguments. He added that reaching an agreement is not urgent, as there is still plenty of time for negotiations and, if needed, they can enlist the help of a public conciliator.
"The minimum wage is agreed by social partners — the ETTK and the EAKL," Aas said. "As far as I know, members of the government coalition are not interested in getting involved in this decision. It is important to note, however, that a number of public sector expenses are pegged to the minimum wage."
The current monthly gross minimum wage for full-time employment in Estonia is €540; the minimum hourly wage is €3.21.
Editor: Aili Vahtla